New property rules to keep buyers and sellers on their toes

RULES demanding buyers and sellers stick to their contractual obligations by a strict deadline have been relaxed as part of a suite of changes affecting property transactions in Queensland.

The three most significant changes to the Real Estate Institute of Queensland residential contracts includes amending the ‘time is of the essence’ rule that meant all obligations had to be met by 5pm on the due date.

The new changes allow buyers and sellers to obtain an extension of up to five days after settlement if they are unable to settle due to the inaction or delay of a financier.

“Moreover, there is no requirement to provide any evidence to support this request for an extension,” Beerwah law firm Easton Lawyers said.

“This fundamental change to the time is of the essence clause, has seen the Queensland legal community enter into quite a bit of debate, as ‘time is of the essence’ is a fundamental principle of conveyancing practice which has long been relied on.”

Another change is to smoke alarms. In line with recent smoke alarm laws in Queensland that apply to all residences, if you’re selling your property, it must have compliant smoke alarms installed prior to settlement.

If it does not, the buyer can seek an adjustment of the settlement price to rectify the issue, but there is no right to terminate the contract.

“So, the result here is simple, either ensure your property is fire alarm compliant prior to placing it on the market, or sellers can expect to pay for it to become fire alarm compliant at settlement,” Easton Lawyers said.

And while it is now standard for buyers to pay a deposit by direct debit under the new REIQ residential contract, when you pay by direct debit you’re deemed to have paid the deposit on the day you instruct your bank to pay the funds, and this will be considered as “paid on time”.

But Easton Lawyers said the buyer is not off the hook.

“They must also provide evidence confirming the payment was made, otherwise, the seller may terminate the contract,” the firm said.

“So, obtaining and keeping those email or SMS receipts from your financial institution has become vital in this otherwise electronic age.”